When it comes to procurement, a supplier that is socially responsible often has only a small advantage over other competitors. The fact that they are socially responsible, or minority owned, often only helps them if they are ranked very closely with the other leading competitor; if two potential suppliers have similar capabilities, the tie breaker goes to the socially responsible company.
One of the few exceptions is the SmartWay Transport Partnership. The SmartWay Program is a voluntary collaboration between the U.S. Environmental Protection Agency (EPA), Natural Resources Canada, and the freight industry. It is intended to increase energy efficiency while trimming greenhouse gas emissions and air pollution.
There are roughly 250 SmartWay Shipper partners. These include some of the largest shippers in North America. Walmart, CocaCola Enterprises, Lowe’s and FritoLay are all SmartWay participants. These companies have committed to using SmartWay carriers to haul some portion of their freight.
All 100 of the largest truck carriers, and over 2,000 medium and small carriers are certified. SmartWay carriers now account for over 22 percent of all U.S. trucking miles. In short, if you are a carrier in North America and you are not SmartWay certified, you are at a competitive disadvantage.
In addition to truck carriers, logistics companies, barge and rail operators, and multimodal companies participate in SmartWay.
Carriers who join use a SmartWay spreadsheet tool to report information about fuel consumption, miles driven, and the type of fleet the carrier has (drayage, flatbed, LTL, etc.) as well as what type of body the trucks have – dry van, reefer, flatbed, tanker, and so forth. This produces a measure of their emissions for carbon dioxide (CO2), oxides of nitrogen (NOx), particulate matter, grams of emissions per mile, and grams of emissions per ton-mile. Those data elements then enable shippers and logistics companies to calculate their carbon footprint.
Large shippers then use this data in their carbon disclosure reporting.
SmartWay ranks certified carriers into five categories – highest to lowest – based upon how fuel efficient they are in each category of pollutants based on emissions per mile and emissions per ton-mile. Those rankings reflect the type of fleet – truckload, less than truckload, drayage, package delivery, or expedited.
Shippers who have made large public commitments on how much they intend to reduce their carbon footprint will be more likely to work with carriers that score in one of the top categories. Further, the shipper does not have to ask a carrier whether they are SmartWay-registered and what efficiency category they fall into. They can use the carrier’s registration number to look that information up.
The shipper who is using SmartWay data to document how they are doing on carbon emissions is not using exact data, but rather an estimate. The EPA estimates are based on things like miles driven, how full the trucks are, the age of the fleet, what kind of fuel is burned, what kind of truck body the truck has, and so forth, to come up with estimated pollutants per mile.
Each of the five rankings – highest to lowest – represent a range of emissions per mile or ton mile. The shipper is using the midpoint of that range and multiplying by the miles driven, to provide their estimate of what their emissions have been.
In the future, as the Industrial Internet of Things advances, sensors that can precisely measure the pollutants a truck is generating on a shipment may come into existence. At that point we can imagine “smart invoices” that are printed at the delivery site which document the environmental performance on that trip.
We are not there yet.
In the meantime, the SmartWay is a very good program. Many of us are used to thinking of Europe as being ahead of the U.S. on environmental issues. But Europe lacks a transportation public/private partnership as robust as SmartWay. That is a shame. Global shippers are forced to estimate transportation emissions in different parts of the world using different tools and methodologies. And this is much tougher outside of North America.